Experts Weigh In on the 2025 Consumer Outlook for Shopping, Tech

How will consumer buying and priorities evolve in the retail fashion sectors in 2025, particularly considering recent global economic and social changes?  What technologies or innovative practices will significantly shape the retail and fashion apparel industry over the next few years? WWD asked a handful of industry experts in retail, technology and consumer behaviors to weigh in.

Answers have been edited for brevity. This is the first Consumer Outlook 2025 article in a series.

Consumer Buying and Priorities

Katherine Cullen, vice president of industry and consumer insights at National Retail Federation (NRF)

On uncertainty: 2025 has a fair number of unknowns — from tariffs to inflation — that could impact the consumer wallet. What we do know is that consumers’ view of the economy has improved, and they remain supportive of retail sales. The University of Michigan’s consumer sentiment survey climbed for the fourth consecutive month to 71.8 in November 2024, reaching its highest level since April. For the first 10 months of the year, retail sales rose 3.5 percent year-over-year (based on U.S. Census Bureau numbers) and were in line with NRF’s annual forecast of between 2.5 percent and 3.5 percent growth over 2023. The 2024 holiday season demonstrated that consumers continue to prioritize areas like celebrations and are willing to spend to make these events special. 

On “living for today”: At the same time, today’s shoppers are more likely to embrace a “live for today because tomorrow is so uncertain” mentality than they were before the pandemic, which could lead to more of a focus on self care and treating yourself by spending on discretionary categories in 2025. 

Ian Fredericks, chief executive officer at Hilco Consumer Retail, division of Hilco Global

On luxury: There’s big movement away from luxury by consumers, and part of this shift is from what I’ll call the secondary market — people who traditionally couldn’t afford luxury and weren’t your typical luxury buyers. Because of the secondary resale markets that were created, people were using luxury goods almost like assets that they were collecting — watching them appreciate in value on these secondary markets and then reselling them at profits.

What nobody really understands is how much of what’s in the system is brand new, fresh goods that are going to become available over time on the secondary luxury market. I think you’re going to see the bottom drop out of a lot of that secondary market pricing, and see consumer demand continue to go in the negative direction relative to luxury because of those paradigms.

On persistent inflation: In certain categories, inflation is more persistent than I think anybody expected, resulting in a continued shift away from higher-price items in general.

People are continuing to look for value over everything else; so retailers need to stay aggressive in terms of sales and promotions. I think Ross Stores, Marmaxx and similar chains — chains where you can find brands at discounted prices — will continue to see nice results with more and more consumers shopping their stores.

What’s been interesting to me is the distress you’re seeing in the dollar stores. I believe this stems from the fact that the further you go down the socio-economic scale, the more the consumer is pinched. People who need relief the most continue to get squeezed. But, even the dollar stores have had to increase prices, especially on food. Because inflation seems to be most persistent in food, and food is generally a low-margin business, that leaves less discretionary income to spend on other things, like apparel. As a result, not even the dollar stores are immune from some distress. 

Jill Standish, global retail lead at Accenture

On keeping up with the luxury customer: According to Accenture’s research, more than eight in 10 (83 percent) of luxury executives agree that customers are changing faster than their businesses can adapt. Retailers and brands are facing a perfect storm of evolving market dynamics, tough economic headwinds and shifting customer behaviors. Consumers are more demanding than ever, seeking hyper-personalization, sustainability and seamless omnichannel experiences.

Long considered resilient, even in times of economic uncertainty, the luxury market is in the middle of a notable slowdown — its first in recent years. Following a period of heady double-digit annual growth since 2020, the revenue of publicly listed luxury companies dipped 0.4 percent in the first half of 2024.

Nikki Baird, vice president of strategy and product at Aptos, a retail technology company

On uncertainty: 2025 looks to be about as uncertain as 2024, just with new dynamics at play. Consumers are more stressed than ever and at some point may really pull back — or not. They’re trading down and deal-seeking more heavily than ever, and retailers will need to adjust their assortment and promotion strategies to accommodate.

We’re seeing a renewed interest in promotion strategies — trying to develop a unified, flexible promotion strategy that makes shoppers feel like they’re getting good deals while helping retailers to preserve margin.

On the return to stores: Consumers are coming back to stores and malls, especially Gen Z, and retailers recognize that shoppers are looking for different things than from the online experience. They’re looking for actual experiences, for fun and entertainment and the social benefits of hanging out with friends.

At the same time, the economics of online have gotten worse. Everything is more expensive, and retailers are trying to drive down returns and pull back on free shipping. This converges with new expectations about the benefits of stores, so that retailers are looking to drive store traffic through things like free returns or more emphasis on BOPIS.

Technology Takes Hold

Technology is increasing, both on the consumer-facing side for in-store experiences and the “back end” for inventory management, if retailers are willing to make the investment. But is experiential tech serving a purpose or is it just a gimmick? And what’s the consumer comfort level?

Susan Reda, vice president of education content strategy at National Retail Federation (NRF)

On AI: By analyzing numerous customer data points including a shopper’s unique taste, weather where they reside, fit metrics, etc., AI agents can deliver personalized product recommendations. The positive impact on the online shopper experience, the likelihood of minimized returns and the blending of product discovery and purchasing into a singular seamless experience will be game-changing. These tools are in the newbie phase, but two years from now shoppers will wonder how they lived without them. Generative AI is enhancing the ability for better and more accurate virtual try-ons. This application will help to minimize returns, and will offer online shoppers a more immersive experience, similar to being in-store. 

On livestream shopping: While live online shopping in the U.S. has struggled to match the success experienced in China, the tides are about to turn. Increasing numbers of shoppers are tuning in to livestreams, embracing the combination of real-time interaction and seamless purchasing. The mix of entertainment, interactive tactics and real-time excitement is driving conversion and community.

Ian Fredericks, Hilco

On AI for customer experience: Technology looking ahead is really around the in-store experience, and AI could potentially be useful for that — like technologies where people go in, have their body scanned, then get recommendations on clothing that works best for their body shape. That’s going to get more traction over time, but it requires a setup that is capital intensive. Plus, they haven’t cracked the code yet on the consumer’s comfort level of having something scan you.

Additionally, as retailers continue to reduce in-store payroll, they need to figure out ways to make their stores more efficient. Part of that can happen in the fitting room, where a consumer can request a different size through a digital panel or something in the room, as opposed to a salesperson having to consistently check in. And maybe that panel could also make suggestions, which is what happens when shopping online.  

We call those things experiential because it’s more of an experience, but it can feel a bit gimmicky. But that’s what the consumers want, right? A little bit of a gimmick in stores?

On managing inventory: Unrelated to customer experience, there’s RFID and technology around inventory tracking and asset management. It’s still a bit cost-prohibitive to be used in the most effective way, but I think that’s going to get more and more traction, especially to try to control shrink.

Jill Standish, Accenture

On generative AI: Accenture research shows that 81 percent of shoppers want to make buying decisions more quickly, easily and confidently. Additionally, 73 percent seek inspiration. Retailers can stand out and boost revenue by inspiring and guiding consumers throughout their shopping journey. Gen AI can assist by recommending products that better fit shoppers’ needs and preferences, enhancing website descriptions and delivering personalized offers in real time.

Generative AI and augmented reality (AR) tools for virtual try-ons are particularly useful in apparel and cosmetic categories, where fit and color matter. These tools let customers see how products will look and fit before buying and can help reduce returns due to poor fit or mismatched colors.

On virtual assistants: AI-driven customer service systems, such as intelligent chatbots and virtual assistants, can help customers make the best purchases by instantly answering product questions such as “best coat for cold temperatures” or “a red dress under $100.”

Nikki Baird, Aptos

On mobile tech: I think mobile tech for store associates is going to see a resurgence. There are still too many retailers out there that have historically been on the fence — they think their stores are too small to need mobile, or don’t want their store associates distracted, or don’t want to disrupt the “checkout experience” where store associates chat with customers as they wrap up their purchases.

But there’s too much at risk at this point. If you need to acquire customers in stores, if you need stores to serve as pickup points and return points, you must arm store associates with easy, connected enablement. You just can’t expect to win if a store associate has to use this iPad for customer lookup, this mobile device (and separate payment device) to return an online purchase, and then the fixed till for inventory lookup and POS. 

On RFID: I also see RFID taking hold more firmly, and retailers beginning to look at how to take it beyond inventory accuracy into checkout. There’s still a lot of debate about self-checkout — that took a big hit during 2024, but it keeps creeping back in.

I do not see a lot of traction around AR/VR, which almost always comes up as a possible future for in-store experiences. The friction of putting on a (clean) set of goggles and using it to explore someplace else other than where you just walked into (you know, the store) is still too high. And the payoff is too low.